Staples emerges as victor in Essendant bid

Staples emerges as victor in Essendant bid | Smart Association - COPA

After months of what seemed to be a tough tug-of-war, Staples has emerged victorious in the bid to acquire Essendant, defeating Genuine Parts Co.

Illinois-based Essendant accepted Staples' bid of $12.80 per share in cash, or $428.7m, after the latter boosted its previous offer of $11.50 per share. Essendant announced that it intends to terminate the merger agreement it has with Genuine Parts.

It is important to note that Sycamore Partners, the private equity firm which acquired Staples, already owns 11% of Essendant.

In April, Essendant and Genuine Parts Company announced that they had entered into an agreement to combine Essendant and the latter's S.P. Richards business. Genuine Parts made a $12 per share offer and the merger will form a company with a pro forma 2017 net sales of about US$7bn.

In a statement, Genuine Parts said it does not have any plans to make a counteroffer, believing that it had the superior proposal. With the recent news, Genuine expects Essendant to pay US$12m upon termination of the earlier deal.

"We believe that the prospects for SP Richards remain strong and that there is a significant opportunity for SP Richards to grow and deepen its relationships with both independent dealers and other customer channels. As such, we are confident in our ability to drive growth and profitability for SP Richards and to support value creation for GPC shareholders," Genuine Parts said in a statement.

In a separate statement, Essendant said the decision was arrived at in consultation with the firm's legal and financial advisors.

"There can be no assurance that the Staples proposal will result in the consummation of a transaction. Further, there can be no assurance that GPC will propose any adjustments to the S.P. Richards merger agreement. At this time, Essendant remains subject to the S.P. Richards merger agreement and the Essendant Board has not changed its recommendation with respect to the S.P. Richards transaction, nor has it made any recommendation with respect to the Staples proposal," Essendant said.